The Financial Systems Inquiry (FSI) is not the appropriate forum to canvass further changes to the financial planning sector, according to Minter Ellison, which claims the Future of Financial Advice (FOFA) reforms should be allowed to settle in before they are reviewed further.
In its submission to the FSI, Minter Ellison stated that financial advisers had already gone through significant change. It said further change in the short term was not appropriate until enough time had passed to examine the effectiveness of the FOFA changes.
Rather, Minter Ellison asked the FSI to consider whether different regulatory regimes were still appropriate and questioned why some sectors were covered by national law, state law or left unregulated.
"Financial product advice is regulated under the Corporations Act, while real estate investment advice is regulated under state-based regimes and other forms of investment may not be specifically regulated at all."
"Consideration should be given to whether a single investment advice licensing regime should be introduced based on the activity rather than the nature of the investment."
Minter Ellison claimed a reduction in regulation in the retail wealth industry would improve the financial services sector and make it easier for consumers to become financially literate.
The submission stated consumer protection needed to be balanced between protecting consumers from themselves and empowering them to protect themselves without having to impose further regulation or legislation.
Minter claimed regulators, policy settings, licensing regimes and complexity of the financial sector have contributed to limiting the focus of the sector on consumer education.
"At the heart of all of this is the main stakeholder — the consumer — and what we can reasonably expect of them. We believe that the industry as a whole needs to move to a position where we can expect more of consumers because they are better educated."
